Getting energy credit back by the Direct Debit Guarantee instant refund by the bank

jackpotjackpot

So I'm seeing lots of social media posts with customers who had credits on there energy accounts, now getting instant refunds from banks under the Direct Debit Guarantee, for example if the now bust energy company refuse to refund credit and kept taking direct debits, or energy companies stopped responding to emails/calls etc. This also includes energy companies setting up unauthorised DD's or changing amounts without permission. 

If a customer was in credit for £500, and was paying £100 monthly by direct debit customers are claiming x5 months total £500 and banks are refunding within minutes or 24hrs as per the DD Guarantee. 

What is a Direct Debit Indemnity Claim? It is a claim made by the paying bank in respect of an incorrect Direct Debit collection applied to a Payer's account. Remember, an Indemnity Claim is only a challenge of the payment collection method – that is, the Direct Debit.

hydratoad

I'm slightly surprised banks are letting people use the direct debit guarantee this way. After all, in most cases the debits were not incorrect or taken incorrectly, customers agreed to them and were likely properly notified.

However, any contract with the energy company ends with the failure of the business. Unless you are in debt to the energy company you do not owe them anything and they (or their administrators) would have no claim on any further payment.

The only issue might be if the administrators determine that you were properly a creditor and we ended up in a situation where credit balances would only be reimbursed at the nominal non-secured creditor rate. The administrators could choose to offset your recalled payment against any pennies on the pound owed to you for your credit balance.

I actually can't see a scenario where a recall would make you worse off.